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Best of John L Smith

Gaming Guru

John L Smith
 

Court slaps Wynn with $422,380 in fees over slander lawsuit

24 June 2015

Casino baron Steve Wynn is no stranger to self-inflicted wounds. He just suffered another one in his ill-advised slander lawsuit against stock market short-seller James Chanos.

After having his litigation twice dismissed from U.S. District Court under California’s anti-SLAPP statute, Wynn has now been ordered to pay $422,380 in attorneys’ fees and court costs in association with the case. (SLAPP stands for strategic lawsuit against public participation.)

Sure, Wynn probably keeps that kind of money on hand to tip the pizza delivery man. (At last check, Forbes listed Wynn’s personal wealth at $2.8 billion, which places him 512th in the world.)

There’s no question the volatile multibillionaire can afford to cut the check, but imagine drawing the assignment to deliver the bad news. It could have been worse, of course: Chanos’ attorneys had requested approximately $600,000 in fees and costs. But I’m guessing Wynn’s legal eagles didn’t brag to their client that they got him a nifty 25 percent discount.

Being forced to pick up the Chanos check is one more reminder that it was really dumb to fire away at the well-known stock market analyst and founder of the Kynikos Associates hedge fund for discussing publicly what many others were noting privately: namely, that the monstrously lucrative Macau casino market was tanking under the weight of scandal. The Chinese-backed government that issued licenses to print money for companies such as Wynn Resorts Ltd. and Las Vegas Sands Corp. has embarked on a withering corruption crackdown. Its rooting out of crooked high rollers and Triad-associated junket operators has sent casino stocks tumbling. All signs are that the carnage will continue.

In an order signed Friday by U.S. District Judge William H. Orrick of the Northern District of California, Wynn was once again spotlighted in a case that has attracted the attention of First Amendment advocates. Orrick threw out the Chanos suit the first time but allowed for reconsideration, offering, “I dismissed the complaint without prejudice because I concluded that Chanos’s statements were protected opinions, because the complaint did not adequately plead actual malice, and because Chanos’s speech was a matter of public interest.”

A second complaint was also a nonstarter. The judge wrote, “I found that Wynn’s complaint failed for the same reasons as before, and that Wynn could not cure it because Chanos’s statements were not defamatory as a matter of law.”

For some reason dissatisfied with public embarrassment in California, Wynn’s attorneys followed up that lawsuit debacle with another bad idea: an attempt to gut Nevada’s own anti-SLAPP law. That failed, too, but only after it passed unanimously through our sleepy-eyed state Senate.

It’s important to note Chanos made his remarks in 2014 at the Logan Symposium investigative journalism conference on the UC Berkeley campus. He was invited to speak to reporters by renowned investigative journalist Lowell Bergman, who chairs the investigative journalism program. Bergman’s investigative team was busy finishing a “Frontline” documentary on controversies inside the Macau casino business.

After multiple delays, “Frontline” canceled the documentary earlier this year. Although officials stated a concern for the reporting, the timing in an atmosphere of litigation filed by Wynn and Las Vegas Sands Chairman Sheldon Adelson is hard to ignore.

At this point, the Macau casino crisis is undeniably huge news — and no attempt at legal intimidation is going to prevent it from continuing to surface. Although Wynn’s fortunes in Macau have fallen precipitously due to the Chinese government’s corruption crackdown, and Chanos has been proven right about the volatile casino game there, the fact is Wynn still remains one of the world’s wealthiest people.

He was wrong to sue the critic and wrong to try to gut Nevada’s tough anti-SLAPP law. And the wounds to his image are self-inflicted.

But he doesn’t have to learn his lesson unless he wants to.